January 2024
Financial Planning

Goodbye 2023, Hello 2024!

By Myra Alport

 

A key question to ask at the onset of a new year is what financial well-being means to you.  Is it a long list of financial to-dos that eventually drop off during the year or is it a plan that focuses on your long-term financial health? 

We are here to help you create a greater sense of ease along the way!   Here are 5 timely tips to incorporate into your thought process. 

Turning 73 in 2024?  Required Minimum Distributions Begin

If you were born in 1951, the waiting is finally over.  2024 is the first year you will be required to take a Required Minimum Distribution (RMD) from your IRA accounts (Traditional, Rollover, SEP or Simple IRAs, any old 401k’s)

For any IRA under Copperwynd oversight we calculate those values for you; they are also available on the Charles Schwab website.  You will hopefully receive notifications for accounts held at other institutions; we are happy to discuss best options for taking these RMDs. 

What about RMDs from Roth IRAs?  They are not required, with certain exceptions. 

You can take your RMD anytime during the year, no later than December 31, of course!   Many clients set up monthly or quarterly withdrawals to better manage their cash flow throughout the year. The ultimate choice is yours.  

Qualified Charitable Distributions

If you are charitably inclined and at least 70-1/2 years of age, consider a Qualified Charitable Distribution from your IRA.   You can provide us with a list of qualified charities and the amounts you wish to donate, and we will handle the rest for you.   The maximum annual amount that can qualify for a QCD is $100,000.

Benefits include:

  • The potential to reduce your taxable income.  Normally, IRA distributions are taxable to you; with a QCD these distributions are excluded from your taxable income as long as they are paid directly from the IRA to the eligible charitable organization.  

  • Saves you the time from writing the check and mailing it. 

  • Helps to keep income below certain thresholds when it comes to the taxability of Social Security and higher Medicare premiums, etc.

  • You don’t have to itemize deductions on your tax return to make a QCD.

  • QCDs pair well with RMDs

 

Tax Season Readiness

Before you know it, tax season will be here.   With the TD Ameritrade transition to Charles Schwab behind us, we want you to be well-prepared when it comes to your tax documents.

For the 2023 tax year only, Copperwynd clients whose accounts were previously held at TD Ameritrade will receive 2 sets of tax documents, one from each custodian.  The most common forms are:

  • 1099-R Distributions from retirement accounts

  • 1099-DIV Dividend income and capital gains distributions from brokerage accounts (trusts, individual and joint accounts)

  • 1099-INT Interest from individual bond holdings

 

Automate Savings

One way to improve a savings habit is to set up recurring transfers at your bank and/or direct a portion of your paycheck to your savings account without having to remember to do it.  Easy peasy!   If you consistently find yourself with extra cash on hand after all of your monthly bills are paid, start small and build up from there.  As the account grows, you will be more inclined to increase the amount over time.  

 

Payroll Tax Withholding

If you are a W-2 employee, a good reminder in the new year is to determine whether you are withholding too little or too much from your paycheck.  Here are some lifestyle changes that  that may prompt a review:

  • Change in marital status.

  • Birth or adoption of a child.

  • Job loss.

  • Major salary increase or income from a second job. 

Owing money at tax time or receiving a large refund could be a sign that your withholding is off.  Visit the IRS  tax withholding estimator for assistance.

 

Financial well-being means different things to each of us.   What does financial well-being mean to you?  I would love to hear your thoughts!  Drop me a note at malport@copperwyndfinancial.com

If you have questions, please contact us.

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To download the January 2024 Newsletter: CLICK HERE

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